Citigroup Inc. (C) Settles FHFA Suit. Here’s Why It’s Still a Buy

The installation of Michael Corbat as CEO, along with Michael O’Neill as chairman, was an important inflection point. O’Neill has proved that he can turn around franchises, most recently at Bank of Hawaii after the dot-com bubble burst. Citi can earn at least $5 a share this year, versus a consensus of $4.70, primarily through cost-cutting and reducing losses at Citi Holdings. By the end of 2014, through a combination of cost-cutting, buybacks, noncore-asset sales, and winding down runoff entities, Citi can be a $70 stock.

In a roaring bull market that offers fewer and fewer bargains, Citigroup Inc. (NYSE:C) still looks reasonably priced. The bank, long discarded by investors as a basket case, could continue to regain favor as investors become more familiar with its turnaround.

Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him on LinkedIn. The Motley Fool owns shares of Citigroup.

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